SINGAPORE: Staying invested in the stock market is likely the best strategy for investors amid volatility arising from the war in the Middle East, according to analysts.
"Military conflicts generally have a short-lived impact on markets," said Ritesh Ganeriwal, head of investment advisory at Syfe, a digital investment platform.
On average, he said the S&P 500 stock index in the US reaches a bottom in about two weeks, and recovers in about a month.
The Bank of Singapore's investment strategy team holds a similar view.
"History shows that geopolitical events typically do not negatively impact equity prices on a prolonged basis," the team wrote in a report shortly after the war broke out.
Investors can add exposure to equities in the event of an overreaction to the conflict, the report added.
A few years from now, the war will likely not be the focus of investors, said Mr Ritesh.
"But AI will probably still be in the headlines, driving productivity gains and economic growth. If you look at it that way, the case for staying invested and focusing on fundamentals is strong," he said.
But DBS chief investment officer for consumer banking and wealth management Hou Wey Fook said history may not repeat itself.
"Complacency is unwarranted for the recent Middle East conflict," he said in a report for the second quarter of 2026.
He said investors are advised to adopt risk management measures when constructing their portfolios, and said that could include gaining greater exposure to gold.
Since markets have fallen over the past two weeks, there could be opportunities to buy stocks that are trading at discounts, said Mr Sean Teo, a global sales trader at Saxo Singapore.
Investors who are looking to add to their portfolios should buy stocks that have proven themselves, and those that have come off their highs during the market swings, he said.
If the war lasts for a prolonged period, there may be even more discounts due to "emotional selling", Mr Teo said. "Staying invested and sticking to your long-term plan matters more than trying to time every swing."
Exiting the market could be costly if inflation ticks higher and erodes your buying power, he added.
When the war ends, he said stocks directly affected by oil would look more attractive, as their input costs go down and their profit go up.
Mr Ritesh said it is important to be diversified and disciplined.
"We’ve moved on from the broad rally we saw in the past few years, which got many investors used to instinctive dip buying," he said.
He added that gold is a good buffer and can drive returns during uncertain times, while bonds can provide stability.
The US dollar could weaken when the war de-escalates, he warned. Investors should balance exposure to the US dollar with exposure to the Singapore dollar, he said.
The Singapore dollar has been relatively steady, and would remove currency risks for those who live in Singapore.
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"Military conflicts generally have a short-lived impact on markets," said Ritesh Ganeriwal, head of investment advisory at Syfe, a digital investment platform.
On average, he said the S&P 500 stock index in the US reaches a bottom in about two weeks, and recovers in about a month.
The Bank of Singapore's investment strategy team holds a similar view.
"History shows that geopolitical events typically do not negatively impact equity prices on a prolonged basis," the team wrote in a report shortly after the war broke out.
Investors can add exposure to equities in the event of an overreaction to the conflict, the report added.
A few years from now, the war will likely not be the focus of investors, said Mr Ritesh.
"But AI will probably still be in the headlines, driving productivity gains and economic growth. If you look at it that way, the case for staying invested and focusing on fundamentals is strong," he said.
But DBS chief investment officer for consumer banking and wealth management Hou Wey Fook said history may not repeat itself.
"Complacency is unwarranted for the recent Middle East conflict," he said in a report for the second quarter of 2026.
He said investors are advised to adopt risk management measures when constructing their portfolios, and said that could include gaining greater exposure to gold.
BUYING OPPORTUNITIES?
Since markets have fallen over the past two weeks, there could be opportunities to buy stocks that are trading at discounts, said Mr Sean Teo, a global sales trader at Saxo Singapore.
Investors who are looking to add to their portfolios should buy stocks that have proven themselves, and those that have come off their highs during the market swings, he said.
If the war lasts for a prolonged period, there may be even more discounts due to "emotional selling", Mr Teo said. "Staying invested and sticking to your long-term plan matters more than trying to time every swing."
Exiting the market could be costly if inflation ticks higher and erodes your buying power, he added.
When the war ends, he said stocks directly affected by oil would look more attractive, as their input costs go down and their profit go up.
Mr Ritesh said it is important to be diversified and disciplined.
"We’ve moved on from the broad rally we saw in the past few years, which got many investors used to instinctive dip buying," he said.
He added that gold is a good buffer and can drive returns during uncertain times, while bonds can provide stability.
The US dollar could weaken when the war de-escalates, he warned. Investors should balance exposure to the US dollar with exposure to the Singapore dollar, he said.
The Singapore dollar has been relatively steady, and would remove currency risks for those who live in Singapore.
Continue reading...